Currencies Behaving as if They've Been Stretched Too Far

The euro may try probing fresh highs, but that would be vulnerable to reversing down sharply.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: I noted Wednesday that currencies seemed rigid against the volatile stock market session's drop. They were no less rigid while stocks surged Thursday to new highs. The euro may try probing fresh highs, but that would be vulnerable to reversing down sharply.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Thursday's initial selling pressure stopped short of touching last week's prior lows, and the balance of the session extended the past several sessions' narrow ranging at the lows, Probing a fresh low and closing positive would signal a bottom.

Eurodollar
Sep Contract EC; (FXE)
Thursday morning's high barely pierced last week's high, but essentially only ranged sideways through the day. A probe of fresh highs would be vulnerable to reversing down sharply.

Gold
Dec Contract GC; (GLD)
Wednesday's shallow consolidation of the 1700.00 target resolved up by surging Thursday up to almost 1717.00. A second consecutive higher close Friday would confirm 1744.00 is in-play. Closing under 1693.00 would indicate the rally had ended.

Silver
Sep Contract SI; (SLV)
The rally's 33.00 target was met overnight, and retested soon after Thursday's open. Closing above 33.20 would likely extend the rally to 35.40, but closing back under 32.00 would signal the rally's momentum had ended.

30-year Treasury
Dec Contract US; (TLT)
Closing under 150-18 would have targeted 149-22. Dropping under the signal overnight produced a gap down Thursday that touched 149-22. Lower lows extended down to 149-05, with potential for extending down to 148-02 so long as bounces were to hold 149-22 as resistance.

Crude Oil
Oct Contract CL; (USO)
Wednesday's recovery back above 95.15 from fresh lows testing 94.35 had signaled that sellers lost momentum. Not yet signaling that momentum had reversed up did not prevent an overnight rally from extending sharply higher to 97.70 - it just made that difficult to maintain. In fact, its reaction down failed to hold 96.15 support, potentially forming a very bearish Double Top..

Natural Gas
Oct Contract NG; (UNG), (UNL)
Thursday's opening dip to the 2.76 pullback limit reacted up sharply to 2.86 -- but only temporarily, before reversing back down to 2.76. There is no active signal.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.

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